Saturday, September 10, 2011

Caught between globalization and productivity gains, high paying jobs for low skilled American workers are disappearing. The era of mass employment in the USA is coming to an end. The new equilibrium is going to be an employment ratio of well below 50% and a lot more redistribution. This will happen within the next 20 years. In equilibrium, the marginal American will be indifferent between being a "lucky loser" and being at the bottom of the skilled worker distribution.

"Building a world-class transportation system is part of what made us an economic superpower. And now we're going to sit back and watch China build newer airports and faster railroads, at a time when millions of unemployed construction workers could build them right here in America?"

OMG, did you see what he did there? Did debt ceiling budget cuts include laying off professional speechwriters for the President? It's not clear what in the world he's trying to say here but there is no good interpretation.

In an homage to Tosh.0, let's see how many snarky comments I can fit in this blog post.

This is quite interesting. Two studies say that government subsidies appear to be associated with increased childhood obesity. Of course, one has to be careful of endogeneity, since it is likely that poor kids are more likely to be obese, and poor kids are more likely to receive subsidies. (May I point out that the fact that poverty goes with obesity would have seemed like a bizarre claim just 50 years ago? Things can't be THAT bad if our poor people are fat, right?)

Abstract: The National School Lunch Program’s effect on children’s diets has beenextensively studied. Results have tended to be inconclusive regarding the effectiveness of the program. Utilizing more specific treatment groups, we find that participants in the National School Lunch Program do not consume a higher-quality diet at lunch than children choosing not to participate, even though the program is offered — but rather consume a higher quantity of foods while consuming similar amounts at other meals. Furthermore, children attending schools not participating in the National School Lunch Program have dietary outcomes that are not significantly different from program participants.Child care subsidies and childhood obesity

Abstract: In this paper, we study the impact of child care subsidy receipt on low- income children’s weight outcomes in the fall and spring of kindergarten using data from the Early Childhood Longitudinal Study, Kindergarten Cohort. Our results suggest that subsidy receipt is associated with increases in BMI and a greater likelihood of being overweight and obese. Using quantile regression methods, we find substantial variation in subsidy effects across the BMI distribution. Specifically, child care subsidies have no effect on BMI at the lower end of the distribution, inconsistent effects in the middle of the distribution, and large effects at the top of the distribution. Our results point to the use of non-parental child care, particularly center-based services, as the key mechanism through which subsidies influence children’s weight outcomes.

I am going to go out on a limb here, and guess that the answer from P-Kroog is "The program needs to be bigger! Much BIGGER!"

Tuesday, September 06, 2011

The first says: " I like to see accountants on my operating table, because when you open them up, everything inside isnumbered. "

The second responds: " Yeah, but you should try electricians. Everything inside of them is color coded. "

The third says: " No, I really think librarians are the best, everything inside of them is in alphabetical order. "

The fourth chimes in: " You know, I like construction workers.... those guys always understand when you have a few parts left over. "

But, the fifth shut them all up when he observed: " You're all wrong. Politicians are the easiest to operate on. There's no guts, no heart, no balls, no brains, and no spine, -- and the head and the ass are interchangeable."

Why anyone would think that government wants to do what is right for the average citizen utterly mystifies me.

Sure, a Senator is no more greedy than a financial services CEO. Folks, the problem is that a Senator is NO LESS greedy than a financial services CEO. And the Senator faces none of the checks on behavior. He gets to bribe voters in his state with money taken from people in other states. It's a foolproof system.

First, it's odd that there is a movie called, "Munger Road." But there is. Here's the trailer (clearly for folks who live in a trailer park, I might add).

Second, given that I google myself 8-10 times per hour, it's remarkable that I didn't know. It fell to KPC pal (and G*d figure!) Dan Drezner to point out the existence of this offense to reason and cinema. Still, thanks to DD.

UPDATE: Apparently, an actual old fake legend, about a school bus in Illinois. There are even a bunch of YouTube videos, of such high quality as this one, with the car getting "pushed" off the railroad track, uphill.

It turns out MY "pq" is 29, very similar to that of Ron Paul. Doesn't mean all our issue positions are the same, but I would guess that in a 2-dimensional space our issue positions ARE pretty much the same.

Our guy* Tim Groseclose has an interesting web site for his new book. And you can find out what YOUR pq is, though it's a 40 question survey.

*Angus actually owns him. He bought an option, back when it was cheap. At least, he wishes he had.

Abstract: We investigate a phenomenon which we have experienced as common when dealing with an assortment of Italian public and private institutions: people promise to exchange high quality goods and services (H), but then something goes wrong and the quality delivered is lower than promised (L). While this is perceived as ‘cheating’ by outsiders, insiders seem not only to adapt but to rely on this outcome. They do not resent low quality exchanges, in fact they seem to resent high quality ones, and are inclined to ostracise and avoid dealing with agents who deliver high quality. This equilibrium violates the standard preference ranking associated to the prisoner’s dilemma and similar games, whereby self-interested rational agents prefer to dish out low quality in exchange for high quality. While equally ‘lazy’, agents in our L-worlds are nonetheless oddly ‘pro-social’: to the advantage of maximizing their raw self-interest, they prefer to receive low quality provided that they too can in exchange deliver low quality without embarrassment. They develop a set of oblique social norms to sustain their preferred equilibrium when threatened by intrusions of high quality. We argue that cooperation is not always for the better: high quality collective outcomes are not only endangered by self-interested individual defectors, but by ‘cartels’ of mutually satisfied mediocrities.

Either way, fabulous. Really a fine piece of social science. Not least because the phrase "cartels of mutually satisfied mediocrities" sounds a lot like a faculty meeting in the US. Not at Duke, of course. No, really.

This is just inexplicable.“Is fortunetelling a crime? Of course, fortunetelling is not a crime,” prosecutor Laurence Bardfeld said in court recently. But promising to return large sums of money, and failing to do so, constitutes fraud, Bardfeld argued.

Yes, I think the prosecutor is right about that.

And, this: Bestselling romance novelist Jude Deveraux has been identified as one of the Marks’ clients, and she alone paid the family nearly $20 million, according to court documents. Deveraux declined to comment to The Miami Herald, citing the pending case, but in the acknowledgements section of her book Scarlet Nights, in which several characters were based on the Markses, she specifically praised retired Fort Lauderdale Police economics crimes detective Charles Stack, calling him a “true hero.”

Well, Mr. Stack may be a true hero. But Ms. Deveraux is a true moron. $20 million? I want to announce my own psychic services: Angus and I will make up a bunch of stupid sh** about the future (we are ECONOMISTS! IT'S EASY for us!), and we will do it for just $5 million. We'll call the service "Kids Prefer Cash."

Please leave a comment with your contact information. Clerks are on call.

(Nod to the Blonde; I think SHE knew this was going to happen. But then she's psychotic.)

Abstract: We use aggregate country data as well as individual surveys to uncover, for
the first time, the effect of extreme events such as natural disasters and terrorist attacks on entrepreneurial activity. We find that natural disasters and terrorist attacks influence individual perceptions of the rewards to entrepreneurship and, more surprisingly, extreme events affect entrepreneurship rates positively in a robust and significant way.

If it is fashionable today to minimize the importance of the knowledge of the particular circumstances of time and place, this is closely connected with the smaller importance which is now attached to change as such. Indeed, there are few points on which the assumptions made (usually only implicitly) by the "planners" differ from those of their opponents as much as with regard to the significance and frequency of changes which will make substantial alterations of production plans necessary. Of course, if detailed economic plans could be laid down for fairly long periods in advance and then closely adhered to, so that no further economic decisions of importance would be required, the task of drawing up a comprehensive plan governing all economic activity would be much less formidable.

It is, perhaps, worth stressing that economic problems arise always and only in consequence of change. So long as things continue as before, or at least as they were expected to, there arise no new problems requiring a decision, no need to form a new plan. The belief that changes, or at least day-to-day adjustments, have become less important in modern times implies the contention that economic problems also have become less important. This belief in the decreasing importance of change is, for that reason, usually held by the same people who argue that the importance of economic considerations has been driven into the background by the growing importance of technological knowledge.

"Extreme events," by definition (I think) are unexpected changes. Of COURSE entrepenership increases in the aftermath of extreme events. The "more surprising" bit can only be explained, as Hayek explained it, by the nonsensical insistence that technological knowledge and not entrepreneurship is the driving force of capitalist economies.

Of course, it would be possible to document that the relationship between large unexpected shocks and entrepreneurship is direct and predictable, from many works by Kirzner, or Mises, and others. But Hayek's paper was in the A.E.R. Don't you people read? I recognize that it is easier to claim your theory is novel if you constantly pretend that all previous work doesn't exist. But this is egregious.